Tanzania: Mkuchika challenges social security funds to widen pensioners' base

SOCIAL security fund boards and their managements should look for ways to increase the percentage of retired people getting monthly pension payments from the current estimated four per cent.

Minister of State in the Prime Minister's Office responsible for Regional Administration and Local Governments, George Mkuchika, said in Dar es Salaam over the weekend while inaugurating Local Authorities Pensions Fund's new board of trustees, that many retired people in rural areas don't get pension payments.

"Many others, who played a big role in the development of this country, don't get any pension payments simply because they were not formally employed. You who manage these social security funds should find a way to include these people as your beneficiaries," Mr Mkuchika argued.


He pointed out that including millions of retired rural people who are languishing in abject poverty in using the existing social security funds would help the government reduce poverty by more than 10 per cent.

Mkuchika challenged LAPF's new board of directors to spread their investments by working in mega projects with the government and its institutions through public-private partnerships because such arrangements were more secure and would help the country develop faster.
"Instead of seeking to invest alone in an entire project and return 100 per cent ownership, the best option should be to do so through joint ventures," the minister argued.

The country's social security funds account for about 10 per cent of gross domestic product, 45 per cent in government securities investment and 25 per cent of bank deposits which makes the portfolio one of the most important in the economy.

LAPF Director General, Eludi Sanga, and board of trustees Chairman, Professor Hasse Mlawa, commended the outgoing board members for introducing several good policies which helped to boost membership, profits earned from investments and overall financial standing of the Fund.

"Under the outgoing board which came into office in 2007, the number of members increased from 56,478 to 80,529 which represents about 10.6 per cent actual growth," Mr Sanga said.
Commending the board which was also chaired by Prof Mlawa, Sanga said membership annual contributions also increased from 32bn/- to 75.5bn/- over the same period.
"This year, we are targeting to collect 87bn/-," he noted.

Prof Mlawa pledged to continue guiding the Fund to new heights of development during the next five years and lauded the management and staff of LAPF for their creativity and hard work.

Pledging to serve members better, Prof Mlawa said, "Timely and accurate payment of attractive and adequate benefits to our members is a priority of the Board of Trustees. I am pleased to announce the introduction of two new benefits, maternity benefits and funeral grants from August 2010."

Apart from providing monthly pension payments to its members, LAPF, which was established by an Act of Parliament in 2006, also pays invalidity, survivorship and withdrawal benefits.